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INVESTMENT INSIGHTS

Check Before You Invest : Electrotherm (India) Ltd

BSE: 526608 NSE: ELECTHERM ISIN: INE822G01016
  |   Sector:  Metals & Mining   |   Industry:  Steel & Iron Products

Snapshot

Q.1 Which industry/sub-sector does Electrotherm (India) Ltd belong to?
Electrotherm (India) Ltd belongs to the Metals & Mining sector, operating specifically within the Steel & Iron Products segment.
Q.2 Is Electrotherm (India) Ltd a good quality company?
Electrotherm (India) Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Electrotherm (India) Ltd undervalued or overvalued?
Electrotherm (India) Ltd appears Somewhat Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 6.19 2.71
Price to Book -6.76 -0.20
Price to Sales 0.26 0.07
EV to EBITDA 25.43 8.10
Q.4 Is Electrotherm (India) Ltd a good buy now?
Electrotherm (India) Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Electrotherm (India) Ltd?
Electrotherm (India) Ltd revenue growth is -3.7% for FY-2025, which is below its 5-year CAGR of 7.73%, indicating slower growth.

Q.2 Gross Profit margin of Electrotherm (India) Ltd?
Electrotherm (India) Ltd Gross profit margin which is the profit after deduction of direct costs, is 8.1% for FY-2025, which is above its 5-year median of 7.1%, indicating increasing margins.

Q.3 Operating Profit Margin of Electrotherm (India) Ltd?
Electrotherm (India) Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 6.98% for FY-2025, which is in line with its 5-year median of 6.98% indicating stable margins.

Q.4 Net Profit Margin of Electrotherm (India) Ltd?
Electrotherm (India) Ltd Net Profit Margin is 10.41% for FY-2025, is above its 5-year median of 2.51%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 8.1 7.1
Operating Profit Margin (%) 6.98 6.98
Net Profit Margin (%) 10.41 2.51

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Electrotherm (India) Ltd?
Electrotherm (India) Ltd Return on Asset is 23.38%, which is above its 5-year historical median of 3.32%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Electrotherm (India) Ltd?
Electrotherm (India) Ltd Return on capital employed is 42.97% for FY-2025, which is above its 5-year historical median of 9.21%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Cash conversion cycle of Electrotherm (India) Ltd?
Electrotherm (India) Ltd Cash conversion cycle is 31 days, below its 5-year historical median of 40 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.

C: How much debt does the business have and is it at a sustainable level?

Q.8 Debt to Equity ratio of Electrotherm (India) Ltd?
Electrotherm (India) Ltd Debt-to-Equity ratio is -10.75, which is lower the industry average of 0.31, indicating lower debt levels in the industry.

Q.9 Debt to cash flow from operations of Electrotherm (India) Ltd?
Electrotherm (India) Ltd Debt to cash flow from operations is 3.71, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Electrotherm (India) Ltd?

Q.1 Promoter shareholding and pledge status of Electrotherm (India) Ltd?
Promoters hold 29.90% of the Electrotherm (India) Ltd, with 7.87% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Electrotherm (India) Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Electrotherm (India) Ltd vs industry peers?
Electrotherm (India) Ltd revenue CAGR is 7.73%, compared to the industry median CAGR of 7.56%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -3.7 7.6
Gross Profit Growth (%) -8.5 19.2
Operating Profit Growth (%) -31.9 13.8
Net Profit Growth (%) 34.5 24.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 2.25 1.27
ROE (%) - 8.04
ROCE (%) 42.97 11.28
Cash Conversion Cycle (days) 30.94 72

Valuation & price assessment

Q.1 Stock return of Electrotherm (India) Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 25.7% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 25.7% 42.5% 129.5% -29.1%
Q.2 Valuation ratios of Electrotherm (India) Ltd vs historical?
The current P/E ratio of 6.19 is higher than its historical median of 2.71, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 6.19 2.71 17.36
Price to Book -6.76 -0.20 1.63
Price to Sales 0.26 0.07 0.74
EV to EBITDA 25.43 8.10 10.05

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